UAC counts on new system to push sales

KUALA LUMPUR: Cellulose fibre cement board manufacturer UAC Bhd, whose earnings has been slightly affected by high raw material costs, is focusing on new and innovative products and improving productivity to mitigate rising costs.Chief executive officer Koo Hock Fee said UAC would focus on its UCO SolidWall system, which would reduce to only one-third the time taken to put up a wall compared with a brick and plaster wall.The product would translate into cost savings because of the shorter time involved, he said, adding that the company would hold a series of seminars nationwide this month to market it to property developers.Speaking after the company AGM yesterday, Koo said 2007 had been challenging as the prices of raw materials such as pulp and cement had risen 10% and 12% respectively since December 2006, amid weak domestic demand. Read more

(The Star 3-4-2008)

Steel products set for sharp price rise

Steelmakers Mycron Steel and Ornasteel say rising cost of raw materials has compelled them to raise the prices of their products for the next quarter. DOMESTIC end-users across all industries, including manufacturing, construction and automotive, may have to pay as much as US$200 (RM644) a tonne more for flat-rolled steel products in the second quarter of this year because of higher cost of raw materials.Major domestic steelmakers such as Mycron Steel Bhd and Ornasteel Holdings Bhd said that rising cost of raw materials like iron ore has compelled them to raise the prices of their products for the next quarter.This comes in the wake of recent reports that said Japanese steelmakers, led by Nippon Steel, have agreed to a 65 per cent increase in annual iron ore prices from April 1 with miners Vale and Rio Tinto. Read more>

(New Straits Times 23-2-2008)

Supply raw materials at competitive prices, steel mills urged

THE Steel Wire Association of Malaysia (SWAM) is calling for support from local steel mills for the supply of competitively-priced raw materials to the downstream sector."This is to offset mounting pressures on price hikes from scrap, iron ore, energy and freight," it said in a statement. Over the past 12 months, the cost of wire rods has increased eight times, or as much as 35 per cent to RM2,700 per tonne from RM1,659 previously, it said.As wire rods constitute almost 85 per cent of the total price of the finished products, SWAM said, there is no choice but to pass down the frequent high price of the finished product to consumers."Due to the high price of raw materials, our members are now facing intense competition to export their finished products," it said.SWAM said statistics from Malaysia External Trade Development Corp (Matrade) show that for 2006, of the RM8 billion worth of steel products exported, only 45 per cent, or RM360 million, come from steel wire and wire products. Read more

(7-2-2008 New Straits Times)

Building Material Prices Going Up in H2

Industry players see higher prices for steel bars and cement SPECULATION is rife that the prices of controlled building materials like steel bars and cement are set to increase further in the second half of this year.Late last month, the Economic Planning Unit (EPU) held its first special committee meeting with cement and steel industry players to get feedback on their escalating raw material and operational costs.It is believed that the Government will review the ceiling price of major building materials given the serious “pricing” issue especially in the domestic cement and steel markets.

(4-2-2008 The Star)

Construction cost to soar this year

Prices of building materials have surged the past year, causing construction cost to rise by 12 per cent in 2007 alone. All industry players are affected, but the small-timers are hardest hit, especially if they do not have the capacity to cushion such cost increases. For this year, Master Builders Association Malaysia (MBAM) president Patrick Wong said construction cost is expected to rise 20 per cent, though if fuel prices go up, the hike may be 25 per cent. The government raised the ceiling price of steel bars and billets by 12 per cent across the board effective Dec 1, 2007. Despite the rise, which has taken steel bar prices to RM2,419 a tonne from RM1,817, contractors said they still face difficulties in getting supplies and sometimes have to make under-the-counter payments of RM150 to RM200 a tonne.

(21-1-2008 New Straits Times)

Shortage Hurts Builders

Real Estate and Housing Developers Association Malaysia president Ng Seing Liong concurred that the government must allow contractors and builders to import steel from Thailand, China and the Philippines, which were 10% to 15% cheaper than domestic steel. He claimed that despite the recent 12% hike in the price-controlled items, builders and contractors still needed to pay RM250 to RM300 above the new control price for steel bars at RM2,400 to RM2,500 per tonne, given the shortage.

(19-1-2008 The Star)

Contractors: Allow Us To Make Adjustments, Prices Of Building Materials For Government Jobs

Local contractors hope that the government will allow then to pass on increased cost of building materials for all government contracts, following a decision by the government to implement an automatic price mechanism (APM) for cement.

(11-1-2008 New Straits Times)

Higher steel demand and prices to boost Masteel’s earnings

STEEL stocks listed on Bursa Malaysia have been attracting more than their fair bit of investor interest at the beginning of the New Year. This is unsurprising given the upbeat outlook for the sector over the near to medium term.

(9-1-2008 The Edge)

Strong demand for building materials

CIMB Equities Research is maintaining its overweight stance on the construction sector as it sees 2008 as the start of the implementation of the Ninth Malaysian Plan after the award of some RM22 billion worth of projects in 2007. It anticipated construction activities to pick up at a growth rate of 6%, which is the highest since 1997. It believed local demand for building materials would also enjoy strong growth. “We estimate 6% growth for long steel products in 2008, and about 5% growth for cement demand,” it said.

(9-1-2008 The Edge)

Increase In Ceiling Prices of Steel Bars, Billets Draws Protests

DEVELOPERS and contractors in the country are protesting against the 12 per cent increase in government-controlled ceiling prices of steel bars and billets, which took effect from December 1 last year. Both the Real Estate and Housing Developers Association Malaysia (Rehda) and the Master Builders Association Malaysia (MBAM) issued separate press statements yesterday to express their concerns and disappointment.They said the higher steel prices will put further pressure on housing and property prices. Ultimately, they added, it is the house buyers who will bear the brunt of the spiralling prices.

(5-1-2008 New Straits Times)

Ceiling price of steel bars and billets up 12%

PETALING JAYA: The Government has raised the ceiling price of steel bars and billets, which are price-controlled items, by 12% across the board effective Dec 1. The price hike, however, won't be a windfall for steel millers, who have incurred higher raw material costs due to rising international scrap prices. The latest price adjustment was the third last year following two revisions in April and June. The increase would help narrow the gap between the local and international selling prices of long steel products, which are widely used in construction. However, international prices are still higher than domestic prices.

(4-1-2008 New Straits Times)

Rising construction costs a challenge

Sunrise Bhd managing director Datuk Michael Yam views the rise in construction costs as a major challenge. As for challenges, the rising costs are a major concern. Construction costs will continue to increase in tandem with the escalating costs of building materials. Rising oil prices and logistics will also impact the industry. As land, particularly those in prime location, is gradually depleted, prices of remaining pieces of land escalate with decreasing supply, exacerbated by increasing demand from developers. Also, the increase in cost of not only replacing labour but professional and technical personnel as they seek employment in lucrative markets, such as the Gulf Cooperation Council countries, Singapore and Vietnam, would drive costs up.

(2-1-2008 The Edge)

Builders cast wary eye on prices of building materials

KUALA LUMPUR: The abundance of 9MP and economic corridor projects will not distract the local construction industry players from casting a wary look on building material prices, partly due to the introduction this month of the hotly contested automated pricing mechanism (APM). Industry observers are expecting steel and cement prices to spike in the wake of the APM, pinching the margins of construction players already burdened with rising fuel prices. Escalating building material prices will put a dent in margins

(2-1-2008 The Edge)

Builders Say Automatic Price Mechanism Will Raise Costs

PETALING JAYA: Two bodies representing builders are worried that the automatic price mechanism (APM) for setting cement prices, due to take effect today, would further increase their cost burden and in turn affect new property launches. The Real Estate and Housing Developers Association of Malaysia (Rehda) and Master Builders Association Malaysia (MBAM) said in joint statement that any attempt to further increase the price of cement will definitely affect project costs. Inevitably, this will result in upward revision of prices of new housing and property launches.

(1-1-2008 The Star)